By Ben Ssebuguzi
Much as the pigs that murdered slain Col.Ibrahim Abiriga are still at large, Poor youths know the real killers of Crane Bank(CB). According to our Companies Act,CB was also an artificial person who was murdered by some selfish Bank of Uganda officials .
According to Daily Monitor of June 19th 2018, it shows that Tanzanian Billionaires, Aunali and Sajjad Rajabali have bought seven million shares of Equity group worth Ksh344million (Shs13 trillion).Equity group in Kenya are the owners of Equity Bank with branches in Uganda.
The Shs13 Trillion is only less than Shs2 Trillion the total amount of taxes Uganda Revenue Authority collects annually for our current and capital development expenditures (budget).Uganda expects to collect Shs 15trillion in the next financial year 2018/2019.
What Makes Kenyan Companies More Peculiar Than ours?
Kenyan companies have something unique from ours: They have strong and efficient management systems that attract equity investors to invest in them. They also have a supportive regulatory system that enables them to flourish despite challenges like capping interest rates. This has enabled their country to attract huge Foreign Direct Investments which has helped to stabilize their economy unlike ours (Uganda) where our shilling has depreciated by almost 90% for the last 10 years! It is simply because we attract small foreign exchange yet the demand is too high!
I feel envious when Tanzanian billionaires decide to take a whole chunk of their savings and invest it in Kenya and not Uganda. It leaves a lot to be desired when we continue to be backbenchers when it comes to attracting FDI. Our only solace is now our oil in Mutanzigye otherwise we would be on drip. Nevertheless our problem may not be political but Poor management systems among others from the regulators like BoU.
Up to now, i am still doubtful if indeed it was necessary to sale Crane Bank given its tremendous impact it had in the industry and economy at large.
It was an administrative error to cause the resolution of a bank that was in line with the government strategic plan of reducing poverty from peasants through increasing financial depth/penetration among the people from the country side, putting in consideration that CB had about 47 branches country wide and employing many youths. Right now as we speak, only 12% of our population is banked out of the 35million Ugandans! Such a bank needed a helping hand from BoU to recuperate it instead of killing it like mice given the fact that it had sacrificed its prestige and profits in order to reach every corner of Uganda. The is no way we are going to induce the interest rates to come down if we don’t motivate our banks to try and go to the countryside to get savings as the cheapest means of money for lending at lower interest rates. We cannot support the growth of the agrarian base which is still poor, and then carelessly kill banks that try to go where farmers live.
As a budding entrepreneur and economist, i still believe that BoU was supposed to liaise with relevant authorities like Uganda Investment Authority (UIA) and Ministry of finance to get equity investors like those Tanzanian billionaires mentioned above to help recapitalize the Bank that had total Assets worth Shs1.8Trillions than selling it a paltry of USD 50m.If the Bank was not feasible and viable, why did the buyer hastily gather money on short notice?
In conclusion, I therefore call upon BoU to screen out their workers and employ those trained in modern management practices like corporate governance than those who react with a lot of emotions.
Ben Ssebuguzi is Team Leader: Youth Power Research Uganda & Secretary General of Uganda Poor Youth Movement. He can be reached on 0751-811286